I'm a newbie as well, and I am trying to capture from VHS, but from what I have learned so far you need:

A pretty good spec m/c (600MHz+)
A capture card or an A2D converter

I understand that an A2D converter is the better option and I have gone for a Datavideo DAC100 (www.datavideo-tek.com). But with this path your PC needs firewire. Mine came with firewire, but I believe they are cheap to aquire.

The VCR plugs into the A2D converter via composite video, then the A2D converter plugs into the PC via firewire. Then you need capture software.

WinXP come with Window Movie Maker, but you can get WinDV and DVIO from the web.